Citrus Grower May Not Be Joint Employer of Foreign Workers

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By Laura D. Francis

A Florida citrus grower is getting a second shot at convincing a federal judge that it isn’t a joint employer of temporary foreign workers who were bilked out of their pay by a labor contractor ( Garcia-Celestino v. Ruiz Harvesting, Inc. , 2016 BL 417258, 11th Cir., No. 16-10790, 12/15/16 ).

The Fair Labor Standards Act’s broad definition of “employer” can’t be used to decide whether Consolidated Citrus Limited Partnership jointly employed the H-2A workers, the U.S. Court of Appeals for the Eleventh Circuit held Dec. 15. A more narrow common law definition instead applies to the workers’ breach of contract claims.

It doesn’t matter that 1987 Department of Labor regulations say the FLSA standard applies, the court said. That regulation went against the H-2A provisions of the Immigration and Nationality Act and should be disregarded, it said.

That aspect of the decision will have “little to no impact” outside this particular case, attorney Sarah Rich of the Southern Poverty Law Center in Atlanta told Bloomberg BNA Dec. 16. The DOL regulations were changed in 2009 to incorporate the common law joint employer standard and there aren’t any pre-2009 pending H-2A contract claims in the circuit, she said.

The H-2A program provides temporary or seasonal visas for agricultural workers.

First Liability Finding for Florida Citrus Grower

But the appeals court upheld the finding that Consolidated Citrus is a joint employer with Ruiz Harvesting Inc. for purposes of the FLSA. “This was the first case finding a joint employment relationship between a citrus company and farmworkers in Florida,” according to Rich, who represented the workers on appeal.

Citrus is a “big industry” in the state that is increasingly turning to H-2A workers, she said. It’s important that these growers understand that they can be liable under the FLSA, and potentially under common law, so they need to make sure “workers are treated appropriately,” she said.

“The farm labor contractor model is incredibly common throughout agriculture,” Rich said. “It’s been around for more than 50 years,” including in the Florida citrus industry, she said.

But farm labor contractors “tend to be poorly financed” and often aren’t able to pay the full amount of damages they owe the workers, Rich said. “That is why joint employment ends up being such an issue” in these cases, she said.

Joint Employment ‘Common’ Under FLSA

It’s “pretty common” for courts to find that growers are joint employers under the FLSA, Rich said.

However, the FLSA only guarantees the minimum wage, she said. Under the H-2A program, employers instead generally have to pay the adverse effect wage rate, an amount determined annually by the DOL to prevent the employment of guestworkers from undercutting U.S. workers’ wages. The AEWR is almost always higher than the minimum wage under the FLSA, Rich said.

Therefore, H-2A workers have to bring a breach of contract claim to get the actual wages to which they’re entitled, she said.

“Farmworkers are among the most vulnerable workers in the U.S. economy,” and wage theft is “way too common.” Rich said. Although the common law joint employer standard is “tougher” than the FLSA standard, the workers will be making the argument that Consolidated Citrus is still liable for their lost wages, she said.

An attorney for Consolidated Citrus couldn’t be reached for comment on the decision.

Contractor Required Illegal Kickbacks

Consolidated Citrus contracted with RHI to bring in the H-2A workers from Mexico, according to the court. RHI was listed as the employer on the forms submitted with the DOL to get the visas approved. It also was responsible for their pay and housing.

Consolidated Citrus was involved in certain elements of the harvesting process, including clocking the workers’ time, preventing the spread of a citrus disease among the plants and general oversight of the work crews. The grower paid RHI, which in turn paid the H-2A workers.

The workers were earning a piece rate, so RHI was required to provide “build up” pay—a supplement to the piece rate to bring the workers’ pay up to what it would be under the AEWR hourly rate. RHI required the workers to give back all of their build up pay on threat of being sent back to Mexico. It was undisputed that Consolidated Citrus wasn’t aware of the scheme, but the workers sued the company under the joint employer theory of liability.

After various settlements and court orders, two claims against Consolidated Citrus went to trial: class claims for breach of contract and individual FLSA wage claims. The district court found the grower to be a joint employer under the FLSA “suffer or permit to work” standard on both claims, and it awarded $2,722 on the individual FLSA claims and $192,434 on the breach of contract claim.

In a decision written by Judge Frank M. Hull, the Eleventh Circuit affirmed the FLSA ruling and remanded the breach of contract claims for the district court to determine if Consolidated Citrus is a joint employer under the common law definition.

Judges Gerald B. Tjoflat and Paul G. Byron joined the decision.

Attorneys from Florida Legal Services Inc. and the Mesa Estrada Law Office also represented the workers. Allen Norton & Blue, King & Spaulding and Thorpe & Thorpe represented Consolidated Citrus.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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